Skip to main content

What Is the Tax Implication If a Crypto Option Is Classified as a “Collectible”?

If a crypto option or the underlying crypto is classified as a "collectible," any long-term capital gain is taxed at a maximum rate of 28%, which is higher than the maximum 20% rate for other long-term capital gains. This is a significant negative implication.

However, the IRS generally treats cryptocurrency as property, not a collectible, unless it represents a unique digital asset like an NFT.

What Is the Tax Implication of a DAO’s Treasury Holding Different Crypto-Assets?
Can a Negative Funding Rate Persist for a Long Period, and What Does It Imply?
What Is a Section 1256 Contract and How Does Its Tax Treatment Differ from Regular Stock Trading?
What Are the Potential Tax Implications of Investing in a Synthetic ETF versus a Physically-Backed One?